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WORLD 
SHIPPING  DATA 


Report  on  European 
Mission 


By  EDWARD  N.  HURLEY 

Chairman,  United  States 
Shipping  Board 


Washington,  D.  C . 
March  1, 1919 


' 


From:       Edward  N.  Hurley,  Chairman,  United 

States  Shipping  Board. 
To:  United  States  Shipping  Board. 

Subject:     Report  on  European  Mission. 

Merchant  shipping  is  now  the  universal  interest 
of  mankind.  Every  nation,  great  or  small,  is  alert 
to  the  vital  bearing  of  ships  upon  its  future  pros- 
perity. After  three  months  spent  in  the  midst  of 
the  great  events  connected  with  the  termination  of 
the  war  and  the  solidification  of  peace,  I  deem  it  an 
immediate  duty  to  lay  before  my  colleagues  of  the 
United  States  Shipping  Board  a  report  upon  the 
data"  accumulated  by  my  conferences  and  investi- 
gations. 

The  war  has  brought  us  into  a  high  place  as  a 
maritime  power.  I  find  the  peoples  of  the  world 
aroused  to  an  intense  interest  and  concern  as  to 
the  use  we  are  to  make  of  this  power,  now  that 
peace  is  returned.  My  observations  in  Europe 
compel  optimism.  In  America,  you  have  heard 
much  about  British  competition.  In  Great  Britain 
I  heard  a  great  deal  more  about  American  compe- 
tition. The  expressions  of  British  publicists,  news- 
papers and  officials  which  came  to  my  attention 
provided  no  grounds  for  alarm  about  the  future  of 
our  shipping.  The  lesson  I  learned  from  the  Brit- 
ish was  not  to  concentrate  too  much  upon  the 
strength  of  the  competition  we  must  meet.  For 
more  than  a  generation,  we  have  heard  British  sea- 
manship and  British  ship-operating  ability  lauded. 
We  have  shared  this  admiration.  But,  in  our  praise, 


we  have  been  prone  to  ignore  the  advantages  that 
lay  on  the  side  of  the  ships  that  flew  the  British 
Flag.  The  truth  is  that  our  friends  across  the  water 
are,  for  the  first  time  in  many  years,  entering  upon 
a  period  of  actual  competition.  It  is  an  era  regard- 
ing which  I  entertain  no  misgivings.  The  obstacles 
of  inexperience  will  quickly  give  way  before  Ameri- 
can industrial  strength  and  energy.  It  is  a  new  age 
of  ocean  transportation  as  well  as  of  world  policy.  It 
is  an  age  in  which  new  conditions  will  rule  and  old 
advantages  will  become  inoperative.  It  is  an  age  of 
promise  for  those  who  would  participate  in  America's 
high  desting  upon  the  peaceful  seas. 

World  Tonnage  Situation — Summary 

The  first  thing  necessary  is  to  know  where  we 
stand.  It  has  been  possible  since  the  armistice  to 
assemble  the  necessary  information  regarding  the 
war's  effect  upon  maritime  power.  We  know  now  the 
extent  to  which  the, German  campaign  of  piracy  re- 
duced the  steam  sea-going  tonnage  of  the  world,  de- 
spite the  energetic  construction  undertaken  by  the 
United  States  and  the  other  nations. 

At  the  outbreak  of  the  war,  in  July,  1914,  the 
total  steam  sea-going  merchant  tonnage  of  the 
world  (exclusive  of  Germany,  Austria,  and  Tur- 
key) was  34,924,000  gross  tons.*  During  the  war 
the  Allies  and  neutrals  lost  12,815,000  tons  through 
enemy  action.  They  also  lost  2,192,000  tons 
through  marine  risk,  and  about  210,000  through 


*To  compute  deadweight  tons  from  gross  tons,  take  150  per  cent  of 
the  gross  tonnage;  to  compute  gross  tons  from  deadweight  tons,  take 
66  2/3  per  cent  of  the  deadweight  tonnage. 

2 


seizures  by  the  enemy,  making  a  total  loss  of 
15,218,000. 

To  offset  these  losses  there  were  the  following 
gains:  Through  new  construction,  11,856,000  tons; 
through  capture  from  the  enemy,  2,393,000  tons, 
making  a  total  acquisition  of  14,249,000  tons.  It 
will  be  seen  from  the  above  that  the  net  loss  of 
allied  and  neutral  nations  is  only  969,000  tons,  leav- 
ing the  tonnage  of  allied  and  neutral  nations 
33>956,ooo  at  the  close  of  the  war."  In  order  to 
arrive  at  the  total  loss  of  tonnage  for  the  world, 
it  is  necessary  to  take  into  account  the  losses  from 
the  German  and  Austrian  fleets  during  the  war.  As 
the  result  of  careful  study,  it  has  been  found  that 
the  net  losses  for  Germany  and  Austria  are  about 
2,350,000  tons.  If  we  add  to  this  the  net  loss  of 
allied  and  neutral  nations  (969,000  tons),  we  get 
a  total  loss  of  3,319,000  gross  tons.  This  figure, 
however,  is  too  small  to  indicate  the  total  loss  to 
world  tonnage,  due  to  the  fact  that  many  vessels 
were  pressed  into  service  during  the  war  which 
were  considered  unfit  for  service  before  the  war, 
and  many  others  were  kept  in  service  long  after 
they  would  have  been  abandoned  under  normal 
conditions.  If  a  deduction  of  one  million  tons  were 
made  for  actual  and  accumulated  abandonment  and 
other  losses  not  included  in  the  figures  above,  we 
would  have  a  total  of  4,3 19,000  gross  tons  to  deduct 
from  the  merchant  fleet  of  the  world  in  order  to 
^arrive  at  a  fair  estimate  of  its  tonnage  today. 

Since  the  steam  sea-going  merchant  tonnage  of 
the  world  (including  Germany,  Austria  and  Tur- 
key) was  approximately  41,420,000  tons  at.  the  out- 

3 


break  of  the  war,  the  total  tonnage  of  the  same  sort 
at  the  present  time  is  approximately  37,100,000 
tons. 

This  figure,  however,  does  not  give  us  an  ade- 
quate idea  of  the  shortage  in  world  tonnage  at  the 
present  time,  because  for  the  ten  years  previous  to 
1914  the  world  tonnage  of  steam  vessels  had  been 
increasing  at  the  rate  of  approximately  4.7  per  cent 
annually  (about  2j4  million  tons).  If  it  had  con- 
tinued to  increase  at  this  same  rate  from  the  out- 
break of  the  war  until  the  first  of  January,  1919,  it 
would  have  been  between  ten  and  twelve  million 
tons  greater  in  1919  than  in  1914. 

Tonnage  Situation  of  the  United  States 

The  United  States  forged  ahead  as  rapidly  as 
Germany  fell  behind.  In  August,  1914,  at  the  be- 
ginning of  the  world  war,  the  United  States  sea- 
going merchant  marine,  500  gross  tons  and  over, 
included  624  steamers  of  1,758,465  gross  tons,  and 
870  sailing  vessels  and  schooner  barges  of  947,852 
gross  tons,  making  a  grand  total  of  1,494  sea-going 
merchant  vessels  of  2,706,317  gross  tons.  On  No- 
vember n,  1918,  at  the  end  of  the  war,  the  steam 
merchant  marine  had  increased  to  1,366  vessels  of 
4,685,263  gross  tons,  and  the  sailing  vessels  and 
schooner  barges  had  decreased  to  747  vessels  of 
829,917  gross  tons,  making  a  grand  total  of  2,113 
sea-going  vessels  of  5,515,180  gross  tons.  This  does 
not  include  the  seized  enemy  vessels,  which  at  the 
end  of  the  war  aggregated  88  vessels  of  562,005 
gross  tons,  of  which  number  81  of  546,210  gross 
tons  were  steamers,  and  7  of  15,795  gross  tons  were 
sailing  vessels. 

4 


The  total  construction  in  the  United  States 
added  to  the  merchant  marine  during  the  war 
875  vessels  of  2,941,845  gross  tons.  The  pur- 
chase from  aliens  of  233  vessels  of  833,854  gross 
tons,  the  movement  to  the  ocean  from  the  Great 
Lakes  of  66  steamers  of  139,469  gross  tons, 
and  miscellaneous  acquisitions  amounting  to  31 
vessels  of  39,219  gross  tons  are  other  sources  of 
acquisition.  The  loss  of  114  vessels  of  322,214  gross 
tons  by  enemy  action,  of  278  vessels  of  405,400 
gross  tons  by  marine  risk,  of  130  vessels  of  268,149 
gross  tons  by  sale  to  aliens,  and  of  64  vessels  of 
149,761  gross  tons  through  sale  to  the  U.  S.  Gov- 
ernment, abandonment  and  other  causes  accounts 
for  the  decreases.  Losses  of  15  seized  German  and 
requisitioned  Dutch  steam  vessels,  amounting  to 
112,248  gross  tons,  are  not  included  in  the  losses 
given  above. 

Today  we  are  potentially  the  greatest  marine 
power  of  the  earth,  for  the  reason  that  we  possess 
the  greatest  shipbuilding  instrumentalities. 

Great  Britain's  Position  and  Prospects 

At  the  outbreak  of  the  war  the  merchant  tonnage 
of  the  United  Kingdom  was  composed  of  8,587 
steam  vessels  of  over  100  tons  gross,  with  a  tonnage 
of  18,892,000,  and  653  sailing  vessels  of  100  tons 
gross  and  over,  aggregating  365,000  tons. 

During  the  war  British  losses  amounted  to 
9,032,000  tons  gross,  of  which  7,754,000  were  lost 
through  enemy  action;  the  remainder,  1,278,000, 
were  lost  through  marine  risk,  abandonment,  etc. 

5 


The  United  Kingdom  built  4,342,000  tons  of  mer- 
chant vessels  during  the  war.  She  purchased 
530,000  tons  from  other  countries  and  captured 
717,000  tons  from  enemy  countries,  which  were 
later  brought  into  action,  making  a  total  gain  of 
5,589,000  tons  from  all  sources.  Thus  the  net  loss 
of  the  British  during  the  war  was  3,443,000  tons. 
Her  tonnage  at  the  close  of  the  war  was,  therefore, 
15,814,000.  This  figure  probably  over-states  the 
tonnage  available  for  use,  due  to  the  fact  that  many 
vessels  were  pressed  into  service  and  kept  in  service 
during  the  war  which  would  normally  have  been 
written  off  as  losses. 

Now  let  us  note  the  power  Great  Britain  has  re- 
vealed in  forging  ahead.  In  1913,  British  shipyards 
achieved  a  record  output  of  i  ,900,000  gross  tons.  The 
first  year  of  the  war,  1914,  witnessed  a  considerable  re- 
duction; in  1915,  it  fell  again,  and'the  yards  turned 
out  only  650,000  gross  tons ;  the  next  year  compelled 
further  withdrawals  from  the  shipyards  of  men  and 
materials,  and  the  total  output  was  540,000  gross 
tons.  The  British  realized,  however,  that  it  was  a  mis- 
take to  neglect  any  possible  replacement  of  destroyed 
tonnage.  By  renewed  efforts,  they  turned  out  1,200,- 
ooo  gross  tons  in  1917,  and  in  1918  mounted  to  a  still 
higher  total. 

During  the  war  the  British  employed  381,000  men 
on  Admiralty  and  repair  work  as  against  116,000  in 
merchant  shipyards.  It  remains  to  be  determined  how 
large  a  proportion  of  British  shipbuilding  energy  will 
be  diverted  from  Navy  work  to  the  increase  of  the 

6 


merchant  marine.  I  have  heard  the  prediction  made 
in  general  that  the  return  of  shipyard  workers  from 
the  Army  and  other  additions  to  shipbuilding  strength 
will  permit  a  construction  of  nearly  3,000,000  gross 
tons  in  the  present  year. 

I  have  been  much  interested  in  ascertaining  the 
basis  of  the  prediction  that  3,000,000  tons  will  be  pro- 
duced by  Great  Britain  this  year.  I  find  that  the  56 
merchant  shipyards  of  -England  have  246  ways,  which 
have  an  estimated  maximum  annual  output  of  1,882,- 
983  tons ;  that  Scotland  has  35  yards  of  something  less 
than  165  ways,  which  claim  to  be  able  to  produce 
1,067,000  tons,  and  Ireland  has  4  substantial  yards 
which  could  turn  out  at  most  250,550  gross  tons.  Thus 
it  will  be  seen  that  the  total  estimated  maximum  out- 
put of  the  yards  of  Great  Britain  for  one  year,  given 
favorable  labor  conditions  and  an  amplitude  of 
materials,  would  exceed  3,000,000  tons. 

The  yards  of  England,  Scotland,  and  Ireland  had 
309  ships  totalling  1,435,979  gross  tons  on  the  ways 
on  November  30,  1918.  Forty-nine  ships  totalling 
204,089  gross  tons  had  been  launched  but  not  com- 
pleted on  that  date.  It  is  interesting  to  scrutinize  the 
character  and  type  of  the  vessels  which  were  being 
constructed  in  England  at  that  time.  The  cargo  ves- 
sels on  the  ways  numbered  262,  a  total  of  1,104,142 
gross  tons  and  8  vessels  totalling  42,300  gross  tons 
had  been  launched  but  not  completed.  Thirty-two 
tankers  of  approximately  200,000  gross  tons  were  on 
the  ways  and  39  of  somewhat  smaller  total  gross  ton- 
nage had  been  launched  but  not.  completed.  The 
British  were  then  building  12  refrigerator  steamers 

7 


totalling  100,000  gross  tons,  ancl  five  passenger  ships 
which  averaged  something  over  8,000  gross  tons. 
There  were  105  overseas  barges  totalling  53,000  gross 
tons  under  construction  also. 

Junk  Ships 

I  have  heard  a  good  deal  said  about  the  construc- 
tion of  "junk  ships"  in  America,  emphasis  thus  being 
laid  on  the  number  of  small  vessels  we  had  under  con- 
struction. The  impression  was  sought  to  be  conveyed 
that  our  new  ships  would  suffer  thus  by  comparison 
with  those  laid  down  by  our  friends  and  associates 
overseas.  It  may  surprise  these  critics  to  hear,  as  I 
have  heard,  that  British  yards  had  under  construc- 
tion October  31,  last,  66  ships  of  6,000  tons  and 
over.  Our  program  for  that  date  called  for  106  ships 
of  more  than  6,000  tons. 

Turning  Back  to  Peace  Conditions 

The  nations  of  the  world  are  proceeding  somewhat 
slowly  to  emerge  from  the  restraints  imposed  by  war 
utilization  of  shipping.  The  necessities  of  the  situa- 
tion compel  measured  action.  In  England  the  policy 
is  to  avoid  nationalization  of  shipping  and  to  with- 
draw control  as  promptly  as  possible.  The  move- 
ments in  this  direction,  while  considerable,  are  subject 
to  needful  restrictions  thus  far.  It  was  only  the  other 
day  that  a  prominent  English  newspaper  spoke  very 
vigorously  of  the  desirability  of  restoring  the  rule  of 
private  initiative.  The  sale  of  certain  uncompleted 
standard  ships  has  been  arranged  by  the  British  Gov- 
ernment and  it  may  be  well  to  draw  your  attention  to 
the  procedure  under  which  this  transaction  was  con- 
ducted. In  January,  Lord  Inchcape  in  a  letter  to  the 

8 


Chamber  of  Shipping  announced  that,  in  conjunction 
with  Sir  Owen  Phillips  (of  the  Union  Castle  Line),  he 
had  agreed  with  the  Shipping  Controller  to  take  over 
the  contracts  into  which  the  Government  had  entered 
with  shipbuilders  for  the  construction  of  standard 
steamers.  About  137  such  steamers  were  building 
and  this  number  was  therefore  involved.  The  agree- 
ment does  not,  however,  reach  to  the  f^rro-concrete 
steamers,  few  in  number,  which  are  under  construc- 
tion for  the  Admiralty.  Lord  Inchcape  went  on  to 
state  that  the  vessels  secured  would  at  once  be  offered 
to  British  shipping  companies  on  the  terms  on  which 
they  were  acquired.  In  the  allocations,  regard  would 
be  had  to  the  magnitude  of  losses  suffered  by  the 
respective  applicants  during  the  war. 

Lord  Inchcape  and  Sir  Owen  Phillips  are  apparently 
little  more  than  the  intermediaries  between  the  Min- 
istry of  Shipping  and  the  shipping  companies.  In- 
stead of  conducting  the  business  by  private  sale,  as 
has  been  done  in  the  case  of  completed  steamers,  the 
Ministry  has  divested  itself  of  its  building  contracts 
by  a  single  transaction  and  has  shifted  to  the  shipping 
companies  as  a  body  the  task  of  allocating  the:  un- 
finished tonnage.  Such  a  procedure  is  simpler  for 
the  Ministry,  and,  I  am  informed,  more  satisfactory 
to  the  companies. 

What  the  British  ship-owner  gains  through  pur- 
chasing at  this  stage  is  the  opportunity  of  having  the 
standard  boats  completed  somewhat  according  to  his 
individual  needs.  The  chief  criticism  of  such  boats 
has  been  their  reported  inadaptability  to  varied  ser- 
vices. But  it  has  been  pointed  out. that  considerable 

9 


adaptation  would  be  possible,  if  prospective  purchasers 
could  give  directions  and  have  them  followed.  This 
now  becomes  possible. 

The  terms  of  purchase  and  repurchase  are  not 
known.  The  estimate  appearing  in  the  newspapers 
relative  to  the  transaction  between  the  intermediaries 
and  the  Ministry  is  that  some  £20,000,000  is  involved. 
Undoubtedly  the  Ministry  is  writing  off  a  consider- 
able part  of-  its  construction  costs,  and  the  price  made 
to  the  companies  is  naturally  a  satisfactory  one. 

The  Situation  in  Other  Nations 

The  study  of  Shipping  Board  experts  revealed  a 
teeming  ambition  among  other  powers  to  achieve  a 
higher  maritime  standing.  In  almost  every  country 
the  desire  exists  not  only  to  replace  war  losses  but  to 
add  new  totals  to  be  used  in  the  work  of  reconstruc- 
tion and  in  developing  new  foreign  trade.  "The  cum- 
ulative miseries  of  four  and  one-half  years  have  re- 
minded the  world  that  civilization  is  transportation/' 
said  a  noted  British  authority  recently,  "and,  as  the 
sea  controls  the  land,  ships  are  far  more  important 
than  railways  since  they  constitute  the  principal,  in- 
deed the  one  means  of  carriage  between  those  nations 
dependent  upon  the  outside  for  their  foods  and  raw 
materials/'*  Even  Switzerland  has  not?  escaped  this 
desire  to  acquire  a  merchant  marine.  I  am  informed 
that  the  Swiss  intend  to  construct  a  merchant  navy  of 
their  own,  which,  after  the  canalization  of  the  Rhine, 
will  bring  coal  oil,  grain  and  other  necessary  supplies 
in  exchange  for  the  manufactured  goods  of  Switzer- 
land. 

10 


France  Aspires 

France  is  planning  her  first  effort  in  modern  times 
to  secure  a  merchant  marine  commensurate  with  her 
foreign  trade.  France  lost  528  vessels  of  907,000 
gross  tons  through  enemy  action  during  the  war.  Her 
loss  constituted  about  39  per  cent  of  her  entire  mer- 
chant fleet  at  the  outbreak  of  the  war. 

In  connection  with  the  rehabilitation  of  the  French 
Merchant  Marine,  Monsieur  Bouisson,  commis- 
sioner for  the  Mercantile  Marine,  recently  expressed 
himself  as  being  in  favor  of  recovering  all  of  the 
French  tonnage  destroyed  by  submarines  from  her 
associates  in  the  war.  This,  he  thinks,  would  be  only 
a  fair  payment  for  the  efforts  of  France's  arsenals, 
shipyards  and  naval  shops  on  behalf  of  her  associates. 

Great  Britain  has  tentatively  agreed  to  build  500,- 
ooo  tons  of  shipping  for  France  when  conditions  per- 
mit, and  France  expects  further  to  strengthen  her 
merchant  fleet  by  purchases  of  ships  from  other  ship- 
building nations. 

The  French  Navy  League,  representing  the  princ- 
ipal French  shipping  companies  and  shipbuilding  in- 
dustries, has  appealed  to  President  Wilson  to  use 
his  influence  in  enabling  France  to  reconstruct  her 
merchant  fleet.  France  has  lost,  as  a  result  of  the 
war,  40  per  cent  of  her  tonnage  and  thousands  of 
her  best  seamen.  All  her  shipyards  have  been  turned 
over  to  producing  war  material,  so  that  she  was  unable 
to  replace  her  losses  by  new  construction.  The  pro- 
posals which  the  League  places  before  President  Wil- 
son are  three :  first,  that  German  and  Austrian  ship- 
ping be  given  to  France  to  replace  her  losses  ton  for 
ton;  second,  that  French  shipowners  be  immediately 

11 


enabled  to  buy  1,000,000  tons  of  ships  built  in  Great 
Britain  and  1,000,000  ton  of  ships  built  in  America; 
third,  that  French  shipowners  be  enabled  immediately 
to  construct  in  American  shipyards  2,000,000  tons  of 
cargo  steamers.  The  French  indeed  have  large  plans 
for  their  new  enterprise. 

X 

Italy  Reaching  Out  for  Tonnage 

Italy  lost  more  than  half  her  merchant  fleet  during 
the  war.  Her  losses  through  enemy  action  were  565 
vessels  with  a  tonnage  of  852,000  or  51  per  cent  of  her 
entire  fleet  in  1914. 

Italian  officials  are  said  to  feel  that  it  is  now  very 
necessary  to  replace  the  lost  vessels.  Cold-storage 
vessels  for  the  transport  of  frozen  meat  are  in  great 
demand;  the  national  consumption  of  meat  being  ap- 
proximately 90,000  tons  yearly,  while  the  home  stocks 
of  cattle  are  greatly  reduced  and  will  have  to  be  care- 
fully husbanded  and  fostered  for  a  long  time  to  come. 
For  such  new  construction  much  material  is  wanting, 
especially  iron,  steel,  copper  and  machinery,  usually 
supplied  by  the  Allies,  chiefly  Great  Britain.  Many 
new  sailing  vessels  are  also  desired,  particularly  those 
provided  with  auxiliary  engines  using  oil  or  benzine, 
up  to  about  600  tons,  for  the  coasting  trade. 

Much  had  been  done  towards  encouraging  ship- 
building on  the  existing  slips  and  the  laying  down  of 
new  ones.  The  number  of  new  slips  is  reported  to  be 
about  IOQ,  and  it  had  been  estimated  that  in  three 
years  the  Italian  Mercantile  Marine  would  exceed 
4,000,000  tons. 

Although  the  total  output  of  the  Italian  yards  was 

12 


not  notable  in  1918,  there  was  behind  it  a  spirit  of 
whole-hearted  enterprise  which  promises  well  for  the 
future.  Thirty-six  shipyards  are  now  in  operation  and 
15  others  are  planned  and  it  is  hoped  that  a  total  out- 
put of  800,000  tons  annually  can  be  obtained  if  dif- 
ficulties in  obtaining  materials  are  obliterated.  New 
sources  of  supply  of  steel  are  being  exploited  in  the 
island  of  Elba  and  the  valley  of  Eosta. 

Japan  Develops  New  Strength  / 

The  shipbuilding  industry  in  Japan  enjoyed  great 
prosperity  during  the  war  period,  numerous  orders 
having  been  received  from  abroad  as  well  as  from 
Japanese  ship  owners. 

On  June  30,  1914,  an  analysis  of  Lloyd's  registers 
and  the  reports  of  the  Japanese  Department  of  Com- 
munications shows  616  steam  vessels  of  1,625,844 
gross  tons  in  the  Japanese  merchant  marine  of  500 
gross  tons  and  over.  A  similar  study  as  of  November 
i,  1918  shows  a  total  of  792  steam  vessels  with  a  gross 
tonnage  of  2,010,382,  an  increase  of  176  steamers  of 
384,538  gross  tons  or  approximately  25  per  cent. 
This  net  increase  is  accounted  for  through  the  con- 
struction of  284  steamers  of  768,325  gross  tons  and 
the  purchase  of  43  vessels  of  130,  817  gross  tons  and 
the  loss  of  30  steamers  of  131,677  gross  tons  through 
enemy  action,  of  75  steamers  of  123,7,83  gross  tons 
through  marine  risk,  and"  of  43  steamers  of  180,141 
gross  tons  through  sale  to  aliens  and  through  mis- 
cellaneous adjustments  amounting  to  78,003  gross 
tons. 

During  the  period  of  greatest  submarine  activity, 
when  the  needs  for  our  armies  in  France  were 

13 


rapidly  outgrowing  the  capacity  of  available  shipping, 
the  Shipping  Board  seized  an  opportunity  to  secure 
280,000  tons  of  Japanese  vessels  at  short  notice. 
About  150,000  tons  were  chartered  to  us  immedi- 
ately, and  we  furnished  the  steel  to  complete 
130,000  tons  which  were  then  under  construction. 
The  latter  vessels  were  completed  and  delivered  to 
us  at  record  speed.  The  completion  of  this  tonnage 
left  idle  thirteen  highly  efficient  Japanese  shipyards 
capable  of  turning  out  ships  faster  than  we  could 
possibly  expand  our  own  facilities  at  that  time  and 
get  anything  like  equal  results.  The  demand  for 
ships  was  still  the  crux  of  the  military  situation  in 
France,  and  the  Shipping  Board  did  not  hesitate  to 
give  the  Japanese  yards  contracts  for  thirty  more 
vessels.  Excellent  progress  has  been  made  on  these 
contracts,  80  per  cent  of  the  steel  having  been  rolled 
here  and  shipped  to  Japan. 

The  tonnage  chartered  from  Japan  is  being  re- 
turned to  them  just  as  rapidly  as  Chipping  condi- 
tions will  permit. 

Japan  has  developed  great  shipbuilding  power. 
She  is  developing  new  sources  of  steel  supply  in 
China  with  a  view  of  becoming  less  dependent  upon 
Europe  and  America  for  plates.  At  the  same  time 
it  is  proper  to  mention  the  fact  that  there  is  a  sur- 
plus of  shipbuilding  steel  in  England  on  which  the 
British  authorities  are  granting  preferential  ocean 
freight  rates  to  the  Far  East. 

The  number  of  ship  ways  in  Japan  on  January  i, 
1919,  was  145.  The  annual  normal  capacity  is 
1,200,000  tons.  The  annual  maximum  capacity  is 
estimated  at  1,700,000  tons.  Japan  expects  to  build 

14 


during  the  year  1919,  181  steamers  of  1,000  tons 
and  over,  aggregating  a  total  tonnage  of  1,189,280. 

Sweden's  Yards  Busy 

During  the  war  Sweden  lost  185  vessels  of 
202,000  gross  tons  through  the  hostile  action  of 
the  Central  Powers.  This  loss  constituted  about 
18  per  cent  of  the  total  merchant  fleet  of  Sweden 
at  the  outbreak  of  the  war.  At  the  end  of  1918, 
50  ships  of  approximately  60,000  tons  d.w.  were 
under  construction,  a  record  in  Swedish  shipbuild- 
ing. The  yards  can  get  orders  in  almost  unlimited 
numbers — some  docks  are  engaged  until  1923,  but 
lack  of  materials  limits  the  production.  Plates 
which  formerly  came  from  England  were  badly 
needed  during  the  war.  When  the  English  supply 
was  cut  off,  they  used  plates  of  Swedish  manufac- 
ture, which  are  good  but  not  nearly  sufficient.  Be- 
sides building,  all  the  Swedish  docks  are  engaged 
in  repairing,  equipping,  or  lengthening  steamers 
which  shall  sail  on  the  enlarged  canal  to  the  sea. 

During  the  first  half  of  1918  negotiations  were 
carried  on  in  London  between  the  Allies  and  Swe- 
den which  resulted  in  an  agreement  whereby  the 
Allies  took  over  a  considerable  part  of  Sweden's 
tonnage.  The  Allies  agreed  to  allow  Sweden  to 
import  necessities  and  food  stuffs  under  a  guaran- 
tee against  re-exportation.  Swedish  shipping  re- 
ceived one  advantage  from  the  agreement.  It  was 
now  possible  for  the  rest  of  the  Swedish  tonnage  to 
take  up  connections  between  Sweden  and  trans- 
oceanic countries  in  the  open  market,  and  perhaps 
this  fact  has  in  some  measure  covered  the  loss  and 
risk  of  the  tonnage  destroyed. 

15 


During  the  autumn  the  Oresunds  Yards,  in 
Landscrona,  launched  its  first  ship.  This  dockyard 
has  four  ways,  one  of  which  can  take  ships  up  to 
20,000  tons.  Ten  steamers  from  4,000  to  8,000  tons 
are  at  present  ordered  or  under  construction  at  the 
yard. 

Experience  of  the  Norwegians 

Both  in  amount  and  percentage  Norway  suffered 
greater  loss  than  any  other  neutral  country.  She 
lost  1,178,000  gross  tons  of  shipping,  which  was 
47  per  cent  of  her  total  merchant  flee*-  in  1914. 

At  the  beginning  of  1918,  64  motorships  and 
steamers  Were  being  built,  of  which  5  are  of  steel, 
50  of  wood,  and  8  of  concrete.  All  together  225 
ships  of  about  200,000  tons  were  under  construction 
in  Norway.  Many  of  these  motorboats  may  have 
to  lie  idle  as  soon  as  they  are  finished  for  lack  of  oil. 

In  this  connection,  the  "Verdens  Gang"  of 
Christiania  says  that  Swedish  shipping  interests 
have  55  ships,  of  142,000  tonnage  in  all,  on  order  at 
Norwegian  yards.  However,  shortage  of  materials 
prevents  a  large  number  of  these  .ships  from  being 
built,  and  the  Norwegian  Government  may  prohibit 
the  sending  of  a  considerable  number  to  Sweden 
while  the  Norwegian  need  is  so  great. 

Several  new  shipyards  have  been  built  in  Norway 
and  old  yards  have  been  put  in  repairs  and  enlarged 
both  technically  and  economically.  At  first  it  was 
difficult  to  get  the  necessary  materials,  while  in 
1918  the  exportation  of  iron  from  iron-producing 
countries  was  absolutely  at  a  standstill,  and  it  was 
not  until  the  end  of  the  year  that  many  shipments 

16 


moved.  Therefore  it  has  been  necessary  at  several 
shipyards  to  reduce  their  working  force  and  exer- 
cise economy.  In  order  to  prevent  unemployment, 
it  was  necessary  during  the  year  to  reduce  the  num- 
Jber  of  working  hours. 

Norway  and  America  later  entered  in  an  agreement 
which  guaranteed  Norway  shipments  to  meet  her 
needs  in  such  quantities  as  would  not  hurt  the  Allies. 
No  goods  imported  from  the  United  States  must  go 
to  the  Central  Powers  or  replace  goods  going  to  the 
Central  Powers. 

/  The  director  for  the  Norwegian  "Veritas"  has 
stated  that  it  will  certainly  be  difficult  to  replace  the 
great  loss  in  ships  within  a  reasonable  time,  because 
all  shipbuilding  countries  will  first  attend  to  their 
own  needs.  It  was  'therefore  important  that  the 
Norwegian  ship  and  machine  workers  should  be 
increased  in  order  to  build  ships  of  a  size  which  will 
be  in  demand  after  the  war,  namely,  steel  ships  of 
5,000  to  15,000  tons  d.w.,  supplied  with  the  most, 
economical  engines  and  machines. 

Concrete  shipbuilding  has  shown  a  remarkable 
development.  .Norway  was  the  first  to  take  up  this 
industry;  the  first  concrete  ships  have  been  put  in 
commission  and  the  building  methods  used  in  Nor- 
way have  been  copied  by  several  other  countries. 

Tonnage  Situation  of  Denmark 

An  analysis  of  Lloyd's  registers  shows  that  the 
429  steamers  of  737,532  gross  tons,  500  gross  tons 
and  over,  in  the  Danish  merchant  marine  as  of 
June  30,  1914,  had  decreased  to  approximately  329 
steamers  of  600,000  gross  tons  as  of  June  30,  1918, 

17 


a  decrease  of  approximately  100  vessels  of  137,532 
gross  tons,  or  nearly  20  per  cent  in  tonnage.  Den- 
mark's losses  due  to  enemy  action  were  unusually 
heavy,  amounting  for  the  period  to  143  steamers  of 
219,000  gross  tons.  Losses  by  marine  risk  of  17 
steamers  of  23,137  gross  tons  were  slight  in  com- 
parison, while  sales  to  aliens  of  62  vessels  of  96,606 
gross  tons  almost  equalled  Denmark's  foreign  pur- 
chase of  122,559  gross  tons.  New  construction 
amounted  to  60  steamers  of  90,922  gross  tons. 
Miscellaneous  steamers  dropped  from  registry  or 
broken  up  account  for  the  remainder  of  the  de- 
crease. 

Spain  Suffers  Heavily 

An  analysis  for  1914-1918  shows  that  the  Spanish 
steam  merchant  marine,  500  gross  tons  and  over, 
which  included  397  steamers  of  864,395  gross  tons  as 
of  June  30,  1914,  decreased  to  approximately  300 
steamers  of  650,000  tons  as  of  June  30,  1918,  a  de- 
crease of  97  steamers  of  over  210,000  gross  tons,  or 
approximately  25  per  cent.  This  decrease  is  due 
largely  to  the  heavy  losses  inflicted  by  enemy  action 
of  77  steamers  of  165,930  gross  tons  by  marine  risk, 
34  steamers  of  73,591  gross  tons,  and  to  sales  to  aliens 
of  31  steamers  of  59,7^9  gross  tons.  New  construc- 
tion amounted  to  15  steamers  of  35,448  gross  tons  and 
foreign  purchases  to  25  steamers  of  47,650.  Miscel- 
laneous adjustments  account  for  the  remaining  dif- 
ference. Four  years  ago  the  shipbuilding  industry  in 
Spain  was  confined  almost  wholly  to  the  yards  of  the 
Sociedad  Espanol  de  Construction  Naval  at  Ferrol, 
Cartagena,  and  Matagorda,  and  those  of  the  Compa 

18 


Buskalduna  and  the  Astilleros  del  Nervion  at 
Bilbao.  Now  there  are  a  number  of  new  establish- 
ments. 

Greece 

Greece's  war  losses  were  338,000  gross  tons,  or 
approximately  40  per  cent  of  her  pre-war  fleet.  • 

Holland 

The  war  losses  suffered  by  Holland  were  much 
less  than  that  of  most  other  European  countries. 
She  lost  approximately  200,000  tons  of  shipping, 
or  14  per  cent  of  her  merchant  fleet  in  1914. 

Belgium 

Belgium's  war  losses  amounted  to  99,000  tons,  or 
25  per  cent  of  her  total  fleet. 

Brazil 

Brazil  lost  through  war  risk  about  8  per  cent  of 
her  merchant  fleet  (25,000  tons). 

Austria 

Austria  lost  393,000  tons  of  vessels  during  the 
war.  These  losses  were  due  chiefly  to  seizures  and 
capture  by  enemy  countries,  and  constituted  37  per 
cent  of  Austria's  pre-war  merchant  marine. 

Germany 

The  total  steam  merchant  fleet  of  100  gross  tons 
and  over  under  the  German  flag  on  June  30,  1914* 
amounted  to  2,159  vessels  of  5,291,000  tons.  It  was 
the  second  largest  merchant  navy  in  the  world.  Less 
than  one-half  of  the  German  fleet  of  1914  remained  in 
German  hands  at  the  close  of  the  war.  According 

19 


to  the  best  information  available  1,507,000  tons 
were  in  trade  or  in  ports  of  Germany,  Austria,  and 
Turkey.  The  location  of  334,000  tons  was  un- 
known. No  doubt  the  major  part  of  this  was  in 
German  hands.  Vessels  aggregating  738,000  tons 
were  laid  up  in  neutral  ports,  and  so  far.  as  can  be 
ascertained,  were  still  the  property  of  German  citi- 
zens at  the  close  of  hostilities.  The  outside  esti- 
mate of  1914  tonnage  in  possession  of  Germany  at 
the  close  of  the  war  would  not  exceed  2,580,000. 
Germany's  losses  during  the  war  were  exceedingly 
heavy.  About  2,111,000  tons  (steamers  of  100  gross 
tons  and  over)  were  captured  or  seized  by  countries 
at  war  with  Germany.  Seventy-nine  steamers  of 
187,000  tons  are  reported  lost  through  enemy  ac- 
tion. Germany's  losses  through  marine  risk  during 
the  war  cannot  have  been  very  heavy  inasmuch 
as  few  German  ships  ventured  upon  the  high  seas 
during  this  period.  Germany's  losses  from  this 
source  and  other  sources  not  mentioned  above  were 
probably  about  400,000  tons,  making  Germany's 
total  losses  during  the  war  of  tonnage  which  was  in 
existence  in  1914  about  2,712,000. 

Germany's  fleet  at  the  close  of  hostilities  con- 
sisted, therefore,  of  2,580,000  tons  of  1914  tonnage 
which  she  still  owned,  plus  about  740,000  tons 
which  were  built  during  the  war  making  a  total  of 
about  3,320,000  tons. 

The  Labor  Situation 

The  labor  situation  throughout  the  world  is  vi- 
brant. Experience  of  earlier  generations  has  taught 
us  not  to  expect  a  completely  noiseless  turning  back 

20 


of  the  war  machinery  to  the  uses  of  peace.  Men 
who  have  labored  under  great  strain  yield  their 
attention  more  readily  to  the  agitator.  The  agita- 
tors abound.  The  blight  of  Bolshevism  has  been 
thrown  out  so  that  the  winds  of  the  earth  might 
waft  it  everywhere  to  sap  the  good  strength  of 
humanity.  We  may  count  ourselves  fortunate  that 
the  disruptive  forces  have  gained  no  more  headway. 
The  tendency  to  disorganization  has  penetrated 
the  labor  unions  themselves,  notably  in  England, 
where  strikes  have  been  called  without  the  sanction 
of  the  selected  leaders. 

The  sober  common  sense  of  mankind  is  asserting 
itself,  however,  as  we  found  at  Seattle,  wherever  the 
undesirables  seek  to  arrogate  power.  The  most 
optimistic  student  of  the  labor  situation  today,  how- 
evr,  must  realize  that  it  is  a  time  for  alert  apprecia- 
tion of  new  conditions  and  new  necessities.  Men  in 
responsible  places  must  be  awake  to  the  new  voices 
that  may  be  heard  nor  cling  too  long  to  outworn  shib- 
boleths. The  matter  is  at  the  heart  of  national 
prosperity  in  whatever  phase  you  view  it.  Jt  is  not 
saying  too  much  to  assert  that  the  handling  of  the 
labor  situation  in  any  nation  you  may  choose  will  de- 
termine that  nation's  success  in  shipbuilding  and  ship 
operating  as  well  as  in  every  other  material  depart- 
ment of  her  life. 

The  labor  situation  in  England  is  peculiarly  illu- 
minating and  I  deem  it  expedient  to  include  herein 
a  few  notes  I  made  upon  the  situation  while  I  was 
there.  Strikes  and  threats  of  strikes  have  affected 
the  shipyard  areas.  Stoppages  of  work  have  oc- 
curred at  the  Belfast,  London,  and  Clyde  shipyards. 

21 


At  Belfast,  shipyard  and  engineering  workers, 
and  municipal  employees  in  the  tramway,  gas  and 
electricity  services,  have  been  on  strike,  the  demand 
being  for  a  44-hour  week.  The  strikers  numbered 
40,000,  about  60,000  other  work-people  .having  been 
thrown  into  idleness  by  the  paralysis  of  industry  fol- 
lowing the  withdrawal  of  light  and  motive  power. 

At  London,  ship  repairers  (engineers,  ship- 
wrights and  carpenters,  etc.)  to  the  number  of 
10,000  have  been  on  strike,  the  demand  being  for 
an  advance  of  153  per  week  in  wages. 

There  have  also  been  local  and  partial  strikes 
among  shipyard  men  on  the  Northeast  Coast,  dock 
workers  in  Manchester,  electrical  engineering 
workers  in  Edinburgh  and  shipbuilding  and  engi- 
neering workers  in  Leith. 

Most  violent  of  all  the  demonstrations  that  have 
so  far  taken  place  has  been  the  action  of  the  ship- 
yard and  engineering  workers  in  the  Clyde  district. 
The  men  involved  numbered  something  like  100,- 
ooo,  and  they  demanded  a  4O-houn  week  with  no 
reduction  in  wages.  A  strong  effort  was  made  by 
the  shipyard  workers  to  have  the  municipal  em- 
ployees join  them.  Many  of  the  strikes  which  have 
so  far  occurred  had  one  very  important  feature  in 
common :  none  of  them  were  authorized  by  the  gov- 
erning bodies  of  the  trades  junions  affected,  and  in 
some  cases  they  were  emphatically  repudiated  by 

the  trades  unions  executives. 

• 
The  Future  of  Our  Seamen 

The  future  is  bright  for  those  Americans  who 
would  follow  the  profession  of  the  sea.  My  obser- 

22 


vations  abroad  convince  me  that  there  are  no  ade- 
quate reasons  why  America  should  recede  from  the 
very  high  standards  of  wages  and  conditions  of  life 
she  has  adopted  for  her  seamen.  Here  in  America 
there  exists  an  idea  that  our  seamen's  wages  are 
incomparably  higher  than  in  any  other  nation.  The 
thought  is  widely  propagated  that  these  rates  of 
pay  for  the  labor  of  the  men  who  operate  our  ships 
render  it  impossible  for  us  to  enter  profitably  into 
competition  with  the  other  great  maritime  nations, 
notably  England.  It  is  high  time  that  the  public 
mind  were  disabused  of  this  misconception.  I  have 
obtained  the  facts  regarding  seamen's  pay  both 
in  England  and  France.  The  facts  will  dismay 
those  persons  who  are  agitating  for  a  lower  wage 
scale  on  American  ships.  The  data  in  my  posses- 
sion indicates  indeed  that  the  wage  question  is  not 
an  overshadowing  one  for  those  concerned  with  the 
future  of  our  merchant  marine.  We  are  paying  our 
seamen  $75  a  month.  That  fact  is  well  known  and 
frequently  commented  upon.  England  during  the 
war  paid  her  seamen  $72  a  month.  That  fact  is  not 
so  well  known.  The  British  ships  are  manned  by 
Englishmen  today.  So  much  has  been  said  regard- 
ing the  cheap  Eastern  labor  that  makes  it  possible 
for  British  ships  to  operate  at  great  profit,  that  I 
deem  it  wise  that  you  should  know  that  practically 
every  maritime  nation  of  the  earth  has  now  turned 
toward  the  conclusion  that  it  is  better  to  operate 
their  9wn  ships  with  the  labor  of  their  own  citizens. 
The  war  has  witnessed  a  great  falling  off  of  the 
foreign  labor  employed  under  maritime  flags.  It  is 
my  conviction  that  the  future  will  witness  a  devel- 

23 


opment  of  this  tendency  along  lines  more  and  more 
nationalistic.  Of  course  abolition  of  cheap  Eastern 
labor  and  higher  wages  went  hand  in  hand. 

The  French  and  Dutch  also  are  paying  high 
wages  to  their  merchant  crews.  In  Sweden  the  sea- 
men's wage  scale  is  even  higher  than  in  the  United 
States.  It  is  true  indeed  that  Greece,  with  her 
comparatively  small  merchant  marine,  pays  lower 
wages,  but  that  is  not  a  matter  of  very  great  impor- 
tance'in  determining  the  future  policies  of  a  mer- 
chant navy  as  large  and  powerful  as  that  of  Eng- 
land or  America. 

There  is  scarcely  more  reason  for  predicting  a 
return  of  old  and  low  wage  scales  among  European 
seamen  than  of  a  reduction  of  American  standards. 
Seamen  of  the  world  are  well  organized  in  what- 
ever country  you  may  choose  for  an  example.  They 
have  behind  them  a  long  history  of  privation,  of 
constant  danger  and  of  a  rigid  and  tyrannical  dis- 
cipline.' They  have  shared  recently  in  the  humani- 
tarian benefits  of  a  new  civilization.  They  will 
never  go  back  to  the  old  order.  No  forward- 
looking  man  would  ask  it.  No  one  who  under- 
stands the  force  and  power  and  value  of  the  men 
who  labor  on  merchant  ships^  can  expect  it  for  a 
moment.  It  is  true  that  a  part  of  the  wage  paid  by 
the  European  nations  as  well  as  by  America  con- 
sisted of  war  bonuses.  It  is  problematical,  however, 
how  far  the  halting  of  hostilities  will  reduce  war 
wages.  The  cost  of  living  has  not  yet  gone  'down 
for  these  men  who  performed  such  valiant  service 
upon  the  seas.  England  has  continued  her  war  bonus 
as  a  wage  increase. 

24 


Wages  form  but  a  part  of  the  issue  of  the  sea- 
men's standards.  Their  conditions  of  living  aboard 
ship  and  the  recognition  of  their  rights  as  citizens 
even  upon  the  sea  overshadow  the  wage  question. 
A  high  and  advanced  position  has  been  assumed  by 
xthe  Congress  in  recognition  of  the  rights  and  pre- 
rogatives of  seamen.  The  Shipping  Board  on  its 
part  has  endeavored  to  provide  quarters  for  mer- 
chant crews  which  are  fit  places  for  Americans  to 
live  in.  The  seamen  of  other  nations  I  found  dur- 
ing my  stay  abroad  are  intent  upon  obtaining  the 
same  treatment  aboard  ship. 

The  seamen's  problem  is  a  part  of  the  great 
labor  problem  being  dealt  with,  in  so  far  as  general 
principles  may  be  applied,  by  the  commission  on 
international  labor  legislation  appointed  by  the 
Peace  Conference  at  Paris.  I  have  the  honor  to  be 
associated  with  this  Commission  as  a  representa- 
tive of  the  United  States.  Since  my  return  to  the 
United  States  the  Associated  Press  dispatches  have 
announced  the  acceptance  by  this  Commission  of 
two  principles:  (a)  prohibition  of  labor  by  children 
under  16  years  of  age,  and  (b)  uniformity  of  sea- 
men's wages.  No  official  statement  has  yet  ampli- 
fied this  press  announcement,  but  the  reported  ac- 
tion of  the  Commission  reveals  the  importance 
universally  attached  to  the  seamen's  problem  in  this 
day  when  so  many  great  nations  are  acutely  awake 
to  the  vital  bearing  of  sea  commerce  upon  their 
destiny. 
Ships  and  Foreign  Trade 

Prior  to  August,  1914,  both  the  foreign  trade  and 
the  shipping  of  the  United  States  were  to  a  great 

25 


extent  dominated  by  British  interests,  partly 
through  ownership  or  stockholding,  but  more 
largely  through  contractual  relations  established* 
by  the  powerful  trade  and  shipping  concerns  of 
Great  Britain. 

It  is  quite  natural  that  this  condition  should  have" 
existed,  because  in  the  face  of  the  long  British  expe- 
rience in  foreign  trade  and  in  shipping,  and  the 
British  control  of  desirable  connections  throughout 
the  world,  American  traders  and  ship  operators 
who  wished  to  do  business  found  it  convenient  to  use^ 
British  agencies. 

The  control  of  cable  lines  and  the  only  compre- 
hensive organization  for  gathering  shipping  infor- 
mation (Lloyd's)  gave  the  British  an  enormous 
advantage  in  all  aspects  of  foreign  trade  and  trans- 
portation. 

At  the  outbreak  of  the  war  only  a  part  of  the 
tonnage  under  the  American  flag  was  employed  in 
overseas  trade.  In  1915,  for  example,  only  one- 
seventh  of  the  foreign  trade  of  the  United  States 
was  carried  in  American  bottoms. 

The  total  exports  and  imports  of  the  United 
States  for  the  year  1915  was  approximately  50,000,- 
ooo  long  tons.  With  average  shipping  efficiency, 
the  movement  of  these  goods  would  have  required 
about  9,000,000  gross  tons  of  ships. 

Assuming  an  annual  increase  in  the  foreign  trade 
of  the  United  States  equal  to  the  average  increase 
for  the  five  years  next  preceding  August,  1914,  the 
foreign  trade  in  1920  would  require  a  greatly  in- 
creased merchant  tonnage,  if  it  all  were  to  be  carried 
in  American  bottoms. 

26 


The  consensus  of  opinion  is  that  world  trade, 
during  a  period  of  six  months  or  a  year  following 
the  signing  of  the  armistice,  will  be  less  than  it 
would  have  been  had  normal  conditions  prevailed 
during  the  preceding  four  years.  At  the  same  time 
it  is  generally  believed  that  in  the  years  succeeding 
this  period  the  increase  will  be  enough  in  excess  of 
the  normal  peace-time  rate  to  compensate  for  all 
effects  of  the  war.  It  is  expected,  also,  that  the 
increase  of  production  in  many  lines  of  industry  in 
the  United  States  will  compel  a  rapid  expansion  of 
exports. 

It  has  been  an  accepted  principle  since  the  time 
of  Ben  Franklin  that  a  strong  maritime  power 
should  carry  in  its  own  ships  at  least  50  per  cent  of 
the  aggregate  of  its  exports  and  imports.  In  addi- 
tion it  should  expect  to  handle  some  of  the  trade 
between  countries  that  are  not  yet  in  the  shipping 
business.  Assuming  a  total  export  and  import 
business  in  1920  of  70,000,000  long  tons,  to  trans- 
port 60  per  cent  in  our  own  ships,  would  require  a 
fleet  of  about  7,500,000  gross  tons. 

Shipping  men  generally  agree  that  it  is  not  the 
total  tonnage  but  the  character  of  the  vessels  that 
makes  a  successful  fleet.  The  country  might  have 
10,000,000  tons  of  shipping  which,  if  not  of  the 
right  sort,  could  not  be  operated  profitably  in  com- 
petition with  ships  o{  a  better  type,  belonging  to 
other  nations. 

One  of  the  types  of  ship  which  will  be  desirable 
for  the  new  merchant  marine  is  a  speedy,  effective 
combination  cargo  and  passenger  liner  of  from  fif- 
teen to  twenty-five  thousand  tons  deadweight, 

27 


which  will  be  effective  both  in  the  transportation 
of  high-class  merchandise  and  passengers,  and  for 
a  more  rapid  mail  service. 

In  order  to  modify  the  construction  program  as 
outlined  and  on  an  economic  basis,  a  commission 
of  shipping  experts  has  been  appointed  to  formu- 
late a  program. 

The  three  factors  that  militate  most  strongly 
against  the  natural  and  desirable  expansion  of  the 
foreign  trade  of  the  United  States  are  as  follows: 
(i)  That  in  order  to  distribute  American  products 
and  to  bring  in  imports  through  American  agencies 
and  largely  in  American  ships,  it  will  be  necessary 
to  find  or  develop  seven  men,  who  have  the  expe- 
rience or  training  to  handle  foreign  trade,  where 
there  was  but  one  in  1914.  It  is  essential  thM  the 
men  so  developed  shall  be  thoroughly  American  in 
their  attitude  toward  the  business,  rather  than  bor- 
rowed from  other  nations,  as  was  so  generally  the 
practice  in  pre-war  times.  (2)  The  recruiting  of  an 
American  personnel  for  the  operation  of  the  ships 
and  the  handling  of  the  work  at  the  ports.  (3)  The 
extension  of  banking  facilities.  The  position  of  the 
United  States  in  foreign  banking  will  require  sus- 
tained development. 

Shipbuilding  Costs 

Shipbuilding  is  an  international  business.  Or- 
ders for  ships  may  fly  from  one  nation  to  another 
like  birds,  I  have  heard  someone  say  recently.  We 
must  be  up  and  alert  in  every  matter  affecting  cost 
of  construction  and  cost  of  operation,  if  we  intend 
to  hold  a  position  of  primacy  in  the  great  industries 
of  building  ships  and  operating  ships.  Representa- 

28 


lives  of  the  Shipping-  Board  are  busy  securing  data 
on  costs  of  construction  and  costs  of  operation  afc 
home  as  well  as  abroad.  In  both  respects  the 
sources  of  material  are  widely  scattered  and  the 
material  itself  unformulated,  so  engrossed  have  the 
nations  been  upon  the  business  of  getting  ships  to 
work  without  regard  to  expense.  It  must  of  course 
be  borne  in  mind  further  that  costs  of  ships  during 
war  times  cannot  be  accepted  as  a  criterion  of  costs 
today.  The  results  of  our  inquiries  into  construc- 
tion costs  abroad  will  be  set  forth  in  a  subsequent 
report. 

I  note  that  36  tank  steamers  built  on  the  Atlantic 
Coast  prior  to  1917  cost,  on  the  average,  $68.37  Per 
d.w.t.,  while  12  built  in  1918  are  reported  to  have 
cost  $109.75  d.w.t.  I  asume  that  the  1918  deliv- 
eries would  be  influenced  by  contract  prices  made 
perhaps  as  early  as  1916,  and  would  not  reflect  the 
cost  for  ships  contracted  for  in  1918. 

Fifty-four  ocean  freight  vessels  constructed  yin 
Atlantic  ports  prior  to  1917  cost,  on  the  average, 
$65.75  Per  d.w.t.;  17  built  in  1917  cost,  on  the  aver- 
age, $81.75  per  d.w.t. ;  while  9  delivered  in  1918  cost 
$138.05  per  d.w.t. 

The  cost  of  tank  steamers  on  the  Pacific  Coast 
prior  to  1917  is  reported  to  have  averaged  $64.69; 
the  six  tankers  built  at  those  ports  in  1917  have  an 
average  reported  cost  of  $116.94  per  d.w.t.;  while 
an  equal  number  delivered  in  1918  are  reported  to 
have  cost  $138.38  per  d.w.t. 

Ocean  freight  vessels  built  at  Pacific  Coast  yards 
have  increased  from  an  average  cost  per  d.w.t.  of 
$115.61,  for  deliveries  prior  to  1917,  to  $138.66  for 

29 


1917  deliveries,  and  to  $159.06  for  deliveries  in  1918. 
f  Even  if  it  is  true  that  wages  paid  in  our  shipyards 
are  higher  than  in  British  yards,  I  know  of  no  cause 
for  misgivings  on  that  score.  This  estimated  advan- 
tage in  labor  costs  can  easify  be  overcome  by  advan- 
tage gained  in  other  cost  elements,  and  particularly  in 
employing  our  well  paid  ship  workers.  I  do  not  be- 
lieve that  even  the  most  lugubrious  students  of  wage 
scales  will  debate  the  statement  that  American  labor 
is  more  efficient.  When  we  entered  the  war  our  ship- 
building industry  was  comparatively  a  small  one.  In 
reality  we  had  to  construct  the  industry  before  we 
could  construct  ships.  The  result  was  that  the  ship- 
building industry  absorbed  a  great  army  of  unskilled 
workers  who  although  highly  paid,  could  not  possibly 
be  efficient  at  the  start.  Our  army  of  shipyard  work- 
ers is  today,  however,  a  veteran  and  experienced 
army.  The  men  are  skilled  in  their  trades.  Their 
efficiency  has  increased  at  least  50  per  cent.  This 
increased  efficiency  will  tend  greatly  to  overrule  the 
disadvantages  in  the  matter  of  labor  costs  of  ship  con- 
struction that  operated  against  us  two  years  ago. 

The  shipbuilding  industry  of  America  includes  men 
who  have  the  vision  to  recognize  the  advantages  that 
experience  has  placed  in  their  hands.  Some  of  them 
do  recognize  it.  Since  my  return  from  Europe,  I  have 
talked  with  shipbuilders  who  indicated  a  willingness 
to  reduce  the  contract  price  of  work  given  them  by 
the  government  during  the  disadvantageous  days  of 
the  war.  It  was  heartening  that  this  suggestion 
should  be  made  voluntarily  by  a  shipbuilder.  I  have 
no  hesitancy  in  saying  that  the  justice  of  such  a  move 
is  recognized  at  Washington  and  that  consideration 

30 


is  being  given  now  to  a  revision  of  contracts  which 
will  take  into  consideration  reduced  construction 
costs. 

When  our  shipbuilders  settle  down  to  the  business 
of  estimating  construction  costs  this  Spring,  it  would 
not  surprise  me  to  receive  bids  for  contracts  on  a  basis 
greatly  reduced  from  the  charges  made  during  the 
war.  Our  shipbuilders  are  aggressive,  enterprising 
men.  They  know  how  to  figure  costs  and  they  know 
when  to  take  a  chance.  They  know  that  by  striking 
confidently  ahead  at  this  time  they  can  establish  their 
industry  upon  a  sounder  and  more  enduring  plane. 
They  can  be  relied  upon  to  amaze  those  who  disparage 
their  competitive  abilities. 

Operating  Costs 

An  investigation  as  extensive  as  conditions  permit 
is  being  .made  into  operating  costs.  We  are  endeavor- 
ing to  assemble  all  available  data  from  which  to  obtain 
general  ideas  for  the  development  of  our  maritime 
policy.  One  thing  that  stands  out  is  the  difference  of 
opinion  as  to  the  importance  of  labor  costs  in  ship 
operation.  This  element  is  only  10  per  cent  of  the  cost 
of  operation. 

The  cost  of  operating  vessels  involves,  in  addition 
to  the  question  of  initial  capital  investment,  the  fol- 
lowing points;  (i)  Wages  of  officers  and  men,  (2) 
Insurance  of  the  hull  and  machinery,  (3)  Bunkers 
and  stores,  (4)  Harbor  charges,  fees,  etc.,  (5)  Main- 
tenance and  repairs.  There  are  two  methods  of 
attacking  the  problem  of  operating  costs;  one  is  to 
gather  data  on  the  separate  component  costs  and 
formulate  these  into  hypothetical  total  cost  figures; 

31 


the  other  is  to  get  the  total  cost  figure  from  the  ship 
operators  themselves  and  analyze  it  into  the 'com- 
ponent costs.  Each  methoM  has  its  advantages  and 
disadvantages,  and  lines  are  being  thrown,  out  in 
both  directions  in  the  hope  that  the  results  of  each 
will  serve  to  a  supplement  the  results  of  the  other. 

Data  relating  to  the  wages  of  officers  and  men 
are  on  hand,  but  it  remains  to  be  learned  what  are 
the  numbers  of  officers  and  men  carried  by  vessels 
of  different  types  on  different  routes.  There  is  no 
uniformity  among  the  nations  in  this  respect.  The 
British  navigation  laws  merely  say  that  a  vessel 
shall  be  "properly  manned."  The  enforcement  of 
this  indefinite  standard  is  in  the  hands  of  the  sur- 
veyors employed  by  the  Board  of  Trade,  and  the 
size  of  the  crew  actually  carried  on  a  given  vessel  is 
determined  largely  by  the  previous  practice  in  that 
regard.  Thus  each  vessel  constitutes  a  law  unto 
itself,  and  a  proper  knowledge  of  the  subject  will  re- 
quire an  inquiry  into  the  records  of  a  great  number 
of  ship  operators. 

Presented  at  Washington,  D.  C.,  March  1,  1919. 


32 


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